Initiated by the Financial Institution Flashcards
Investigations may be initiated?
from proactive monitoring for potentially suspicious activity & reactive measures taken to address regulatory findings, referrals or other recommendations
What are the Common initiators to investigation
1) Regulatory recommendations
2) Official Findings
3) Referrals from customer-facing employees
4) Negative media information
5) Search warrant
6) Govt Subpoena
potentially suspicious activity detected from Transaction monitoring
Why should FI initiate (do) TRANSACTION MONITORING
to regularly monitor transactions
to proactively identify potentially suspicious activity
What are the common approaches for TM?
1 creation of in-house Team
2 customizable transaction monitoring rules
3 Third Party Vendor can be engaged to assist with the development and implementation of automated rules
4 use a risk-based approach
What is included in common Approaches for TM
1 creation of in-house Team
2 customisation transaction monitoring rules
3 Third Party Vendor can be engaged to assist with the development and implementation of automated rules
4 use a risk-based approach
What is included in the Tuning Pratices for TM
1) evaluating the output of monitoring rules
2) to determine whether rule adjustments are necessary conduct above and below-the-line testing and examine specific thresholds
Elaborate Wolfsberg Group 2009 Statement on Monitoring, Screening and Searching
An institution’s transaction monitoring framework should be aligned to the risk of its business model,
the products and services offered, and its customer base. The same should be embedded in an institution’s
AML program
Elaborate Wolfsberg Group 2009 Statement on Monitoring, Screening and Searching
An institution’s transaction monitoring framework should be aligned to the risk of its business model,
the products and services offered, and its customer base. The same should be embedded in an institution’s
AML program
What additional points are discussed in Wolfsberg Group 2009 Statement on Monitoring, Screening and Searching
The document additionally discusses types of monitoring, typology reviews, and
staff training.
What should be considered during designing transaction monitoring rules
size of the institution,
products offered, and the features of those products
Financial institutions should
use a _____________to transaction monitoring
Risk-based approach
What is a Tuning Practice
evaluating the output
of monitoring rules, examining specific thresholds and conducting above and below-the-line testing
to determine whether rule adjustments are necessary.
What does the TM Document additional discuss
staff Training Program , typology reviews and types of monitoring
What may be included in employee training programs in relation to referrals
Types of activity that may warrant referrals.
Existence of these referral mechanisms
Internal hotlines are also known?
Ethics, compliance, or whistleblower hotlines.
Who does the Internal hotlines help the employees
It allows the employee to eport a wide range of activity including employee fraud, harassment and discrimina-
tion, violations of code of conduct, theft of company property, and inappropriate gifts.
Can FI retaliate against the person making the report
Financial institution is prohibited from retaliating against the person making a report via
the hotline in most jurisdictions and the financial institution must maintain policies, procedures, and
processes to confidentially investigate the information provided through the hotline
Do banking regulatory agencies requires subpoenas or search warrants to conduct investigation
No , they do not. Rather, their authority to conduct examinations includes
the ability to inspect all books and records of a regulated institution.
What is the two independent obligations of FI on receipt of governmental subpoena or search
warrant
(1) Legally fulfill the requirements of the subpoena or warrant, and (2) Determine whether the activity
of its customer identified in the subpoena or warrant requires the filing of a STR.
Who can issue a Subpoenas
Subpoenas are usually issued by grand juries
Why are he documents and
testimony required by law enforcement agency
These Documents and
testimony are designed to allow the law enforcement agency to investigate suspicious transactions,
develop evidence and, ultimately, put together a case for prosecution.
Why will grand juries issue a Subpoenas to FI
Subpoenas empower a
law enforcement agency to compel the production of documents and testimony.
What may be included along with order to freeze and account or prevent funds from getting withdrawn
sworn affidavit
In some jurisdictions, freezing orders can also be
executed by seizure warrant. Yes or No
Yes
